Tuesday, January 24, 2012

The Road Warrior Coming to Egypt

Timothy Birdnow

Spengler predicts economic collapse in Egypt in a piece in Asia Times Online.http://www.atimes.com/atimes/Middle_East/NA24Ak02.html

From the article:

"Egypt faces a disaster of biblical proportions, and the world will do nothing about it. Officially, Egypt's foreign exchange reserves fell by half during 2011, including a $2.4 billion decline during December - from $36 billion to $18 billion, or about four months of imports.

But the situation almost certainly is worse than that. More than $4 billion left the country during December, estimates Royal Bank of Scotland economist Raza Agha, noting that the December drop in reserves was cushioned by a $1 billion loan from the Egyptian army and a $1 billion sale of dollar-denominated treasury bills.

The rush out of the Egyptian pound is so rapid that Egyptian investors refuse to hold debt in their own national currency, even at a 16% yield. After Islamist parties won more three-quarters of the seats in recent parliamentary elections - 47% for the Muslim Brotherhood and 25% for the even more extreme al-Nour Party - the business elite that prospered under military rule is counting the days before exile.

The first reports of actual hunger in provincial Egyptian towns, meanwhile, are starting to trickle in through Arab-language press and blog reports. A shortage of gasoline accompanied by long queues at filling stations and panic buying was widely reported last week.

In some towns, for example Luxor in Upper Egypt, the disappearance of diesel fuel shut down bakeries, exacerbating the spot shortages of bread."

End excerpt.

Food riots seem likely to come soon. The Obama Administration, completely oblivious to the forces they were unleashing, has handed Egypt to the Islamists, and has guaranteed the collapse of the Egyptian economy at the same time. Egypt is a critical nation in the region, and should Egypt topple the whole Middle Eastern economy is likely to go with it - and Greece will doubtlessly follow. Then the dominoes will fall one after another, inexorably.

We appear to be perched on the precipice of a worldwide catastrophe, and the man in the most critical position is too busy playing golf and fighting Global Warming to be bothered.